Tuesday, November 5, 2019

Eric Levitz - The One Percent Have Gotten $21 Trillion Richer Since 1989. The Bottom 50% Have Gotten Poorer.

It isn't a trickle down, but rather, a gush up.

Happily, the Federal Reserve just released some data that makes the state of this alignment easier to gauge. In its new Distributive Financial Accountsdata series, the central bank offers a granular picture of how American capitalism has been distributing the gains of economic growth over the past three decades. Matt Bruenig of the People’s Policy Project took the Fed’s data and calculated how much the respective net worth of America’s top one percent and its bottom 50 percent has changed since 1989.
He found that America’s superrich have grown about $21 trillion richer since Taylor Swift was born, while those in the bottom half of the wealth distribution have grown $900 billion poorer.
The Intellegencer


Calgacus said...

He makes a major - and almost universal error with "income inequality is much lower in Western Europe than it is in the U.S.".

No - it's higher. It depends on what you are measuring. If you take each individual European country - they are more equal within each country. But if you take Europe as a whole, which makes sense because of the EU, the Euro etc. - Europe as a whole is less equal than the similarly sized entity, the USA. James Galbraith wrote a book about this a few years ago.

Andrew Anderson said...

Well, what do you expect from a government-privileged credit-for-usury-cartel since the rich are, by definition, the most so-called "worthy" of what is then, in essence, the public's credit but for private gain?

Ryan Harris said...
This comment has been removed by the author.
Matt Franko said...

“fraction of the value that America’s corporate lawyers, hedge-fund managers, venture capitalists, specialist physicians, heirs and heiresses, and other high-paid professionals did?”

Bill Gates isn’t one of those, Steve Jobs wasn’t, Jeff Bezos, Larry Ellison, Mark Benioff, Michael Dell, not included.. Elon Musk nope, Andy Grove not, the Qualcomm guys, the Nvidia people not, Sam Walton not..

The real big money people are not in any of this guys categories.... maybe Buffett....

AXEC / E.K-H said...

Gosh! the One Percent have gotten $21 trillion richer: Links on Distribution
Comment on Eric Levitz on ‘The One Percent Have Gotten $21 Trillion Richer Since 1989. The Bottom 50% Have Gotten Poorer.’*

In order to tackle distribution, it is certainly a good thing to have a valid Profit Theory. Economists, though, have to this day NO idea what profit is. Their multiple common-sense notions of profit stem from microeconomic observations that are subject to the Fallacy of Composition and therefore do not translate into macroeconomic profit.

The axiomatically correct macroeconomic Profit Law reads Q=Qm+Qn with Qm=Yd+(I−Sm)+(G−T)+(X−M). This Law tells one, among many other things, that Public Deficit G−T>0=Private Profit Qm which means that the Oligarchy’s financial wealth and public debt grow in lockstep. This explains, as a first approximation, why the “One Percent have gotten $21 trillion richer”. As it happens, the public debt stands currently around $22 trillion. Needless to emphasize that this back-of-the-envelope comparison can and must be greatly refined but it is good enough for now. The Profit Law explains the extremely skewed distribution of income and financial wealth. The primary distributional effect is reinforced by the interest on public debt.

Public deficit-spending/money-creation is a free lunch program for the Oligarchy. The fact is that the so-called market economy is already for a long time on the life support of the State. Profit is in the main produced by public deficits. The Oligarchy, in turn, uses the opulent free lunches to corrupt the State’s legislative, executive, judiciary institutions in its favor. This constitutes a positive feedback loop and this, in turn, explains the exponential deterioration of distribution.

MMTers claim that public deficits are a good thing because they increase “private” financial wealth. This is not quite correct because, on closer inspection, public deficits increase the financial wealth of the one-percenters and NOT of the ninety-nine-percenters. The weasel word “private” obscures this distributional fact. The MMT policy of permanent deficit-spending/money-creation amounts to a permanent self-alimentation of the Oligarchy to the detriment of the ninety-nine-percenters.

Of course, MMTers are Progressives and vehemently against the unequal distribution of income and wealth. They identify the Neoliberals as culprits and their greed-is-good philosophy and their austerity policy. It is important to note that bad philosophy and bad behavior cannot explain the amount of overall monetary profit Qm which is measurable with the precision of two decimal places and determined by simple balance mechanics.

The economic fact of the matter is: so-called free market economies like the USA have long been on full life-support of the State. The continuous creation of financial wealth has become the first and foremost economic task of the State. The Oligarchy is continuously fed by deficit-spending/money-creation. From the perspective of society, though, the Oligarchy’s financial wealth is roughly equal to public debt which means that the net financial wealth of society as a whole is zero. People think that public debt is the business of the State and forget that the State is only an intermediary which, in turn, means that economically they own the debt. So, when a private household calculates its net financial wealth it has to deduct its share of public debt. This is not done, of course, which means that private households are poorer than they think.

Economists in general and MMTers, in particular, deceive the general public about the distributional effects of deficit-spending/money-creation. That is their job as useful idiots of the Oligarchy.

Egmont Kakarot-Handtke

* Intelligencer